The What's Working Religion

After a big rally on Thursday, the market is trying to hold and consolidate heading into the weekend. With volatility still high, I'm looking around for what to invest in.

I noticed a couple of gaming names popping up. Churchill Downs (CHDN) had a huge day on Friday. A little consolidation would make for a nice entry as the stock breaks the October-to-February downtrend.

Monarch Casino & Resort (MCRI) looks like it is getting set to run after a breakout, pullback and a renewed push. The SCTR is at its highest on the chart. Lots of big green volume candles recently.

The healthcare supplier DENTSPLY (XRAY) appears to be breaking out of a basing pattern. The 200-DMA has a little resistance overhead, but the relative strength shown recently (see SCTR) suggests this may be more than just a filling.

 Two other nice charts are in the materials space, which I continue to love. The first is HudBay Minerals (HBM), which broke out in January and has been consolidating around the breakout level. The SCTR suggests it is one of the stronger charts out there. With Thursday's big volume selling candle, this looks pretty good bouncing off the 200-DMA. I want to keep my eye on the momentum uptrend on the PPO; I don't want that to get broken here.

Lastly is Steel Dynamics (STLD). The chart looks set to break above resistance, as the SCTR shows it is one of the stronger charts out there. I like the change in trend on the PPO.

Should be a good weekend to snoop around and find nice setups.

Good trading,

Greg Schnell, CMT, MFTA